The Price and Prize of Strategic Partnering

There’s no shortage of books on creating and managing strategic partnerships, but Luc Bardin’s new one caught my eye for its where-the-rubber-meets-the-road practicality. Bardin has been sales and marketing chief at BP since 2007, and he founded and leads the energy giant’s strategic accounts organization. In Strategic Partnering: Remove Chance and Deliver Consistent Success (Kogan Page, 2014)—a handbook written with his sons, Raphaël and Guillaume—Bardin offers a model and methodology for building successful organizational alliances, based on his experiences and bolstered by the insights and advice of 30 noted executives and consultants.

These days, it seems like the ability to create and manage strategic partnerships is becoming a prerequisite of corporate success. Witness the current volume of announced corporate alliances (more than 10,000 annually, according to Bardin) and plans for future alliances (more than two-thirds of CEOs expect to partner more extensively in the near future, according to a 2012 IBM survey cited in the book).

More strategic partnerships do not necessarily translate into more profits, however. Bardin reports that more than 70 percent of business relationships fail over time, and less than 10 percent deliver on their original targets, so I asked him how a company can beat the odds.

“There has to be a need, a want, and a real potential for transformational value,” he said. “More and more organizations need to develop deeper and better partnerships. I think we’ve reached an inflection point in the structure of the modern firm. Those companies that have chosen to restructure their value chains into networks of strategic relationships are outperforming monolithic firms at every level of operating and financial performance, from operational metrics, to free cash flow, to stock market valuations. This is because the networked firms can concentrate on what they do uniquely well, optimize the use of capital, and quickly adapt to market changes. We hear it everywhere: Business is increasingly about access rather than ownership.

“Organizations also have to want to pursue strategic partnerships. Strategic partnerships should be sought only when one party possesses one or more important assets that the other needs but doesn’t want to develop internally. Usually these assets provide access to critical capabilities or resources, crucial relationships or markets, enhanced security or reduced risk, or major innovations. A strategic partnership should be an ambitious undertaking. In other words, the assets should enable the execution of enterprise strategies, as opposed to individual projects, and their aim should be to capture unique strategic-level opportunities. The parties want to pursue the partnership because it makes them both strategically and sustainably stronger in the long run.

“Finally, partnering is all about value. Truly successful strategic alliances aim to create transformational value for the partners across the breadth of their portfolios. The six most frequent and important sources of value that we see are advanced technologies, integrated supply chains, large-scale geographic expansion, the enhancement and enablement of operating licenses, joint solution offerings, and the introduction of new business models.

“Of course, capturing transformational value is extremely hard work. It requires long-term commitment, bold aspirations, trust, the assumption of risk (especially in the sharing of proprietary information and the willingness to undertake change), and determined collaboration. It also requires a rigorous and repeatable process for creating strategic partnerships capable of delivering extraordinary mutual value—that’s the purview of Strategic Partnering.”

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